Time to reinvent the wheel? Fate of tax for train, buses before voters

Friday, September 21st, 2018 at 12:02am

Some transit service provided by the Rail Runner Express commuter train would have to be eliminated if voters in the November general election don't reauthorize a gross receipts tax that supports the train and regional bus service, according an official for the agency that manages the Rail Runner. (Eddie Moore/Albuquerque Journal)

Voters in four counties this November are being asked to reauthorize a one-eighth of 1 cent gross receipts tax that goes to support the Rail Runner Express commuter train and an expansive regional bus system serving communities in northern New Mexico.

Headquartered in Española, the North Central Regional Transit District’s services stretch from as far as Farmington in the northwest corner of the state to Costilla on the Colorado border, and as far south as Edgewood, with many points in between.

According to the NCRTD, a record-breaking half million passengers utilized the district’s largely fare-free bus service during the past fiscal year – more than half of them (284,285) on NCRTD-operated routes, and the rest on local routes in Los Alamos and Santa Fe that also receive funding from the GRT revenues.

One of the North Central Regional Transit District’s blue buses makes a stop at the South Capitol Rail Runner station earlier this week. (Eddie Moore/Albuquerque Journal)

A 2016 rider survey looked at who used the buses. It says just shy of half of the passengers on the NCRTD’s signature “blue” buses are going to or from work, while 26 percent use them to go shopping and 23 percent are going to or from a medical appointment.

If the question appearing on the November general election ballot does not pass in each of the four counties, “the NCRTD will cease to exist,” Jim Nagle, a spokesman for the transit district, flatly stated.

But not until after 2024. That’s when the tax is scheduled to sunset in each of those four counties.

And it’s not just the bus system operated by the NCRTD that is supported by the tax. Thirty-nine percent of the NCRTD’s operating costs fund the Rail Runner Express, which runs daily between Santa Fe and Belen, and bus services in Los Alamos and Santa Fe.

If the reauthorization of the tax isn’t approved, Rail Runner service could also be jeopardized.

“If the tax is not reauthorized, Rio Metro would have to adjust the Rail Runner Express Service to bring it in line with the budget impact,” Terry Doyle, transportation director for Rio Metro Regional Transit District, which operates the Rail Runner, said in response to questions emailed to him by the Journal. “This would likely eliminate some of the service.”

Doyle said that in order to maintain current service levels, the transit district would have to seek a replacement for the GRT funding source.

Rail Runner funding through the GRT appears to be secure on the southern end of the route. Doyle said Bernalillo, Sandoval and Valencia counties have a similar tax in place, but they don’t have sunset dates.

Doyle said Rio Metro supports the NCRTD’s efforts to reauthorize the tax.

“NCRTD provides vital public transportation connections in northern New Mexico, and provides vital funding for the Rail Runner, ensuring the availability of connections to Albuquerque,” he said.

According to Rio Metro, revenues from the GRT increments generate $14.5 million annually, or roughly one-quarter of its total revenues.

Its ridership data indicate that more than 285,000 passengers boarded the train at one of the four train stops in Santa Fe County in 2017.

But the train’s ridership overall fell 23 percent over a recent five-year period. Opponents have occasionally broached the idea of shutting down the train and selling it.

The sooner the better

The NCRTD began operations in 2007, a year after the Rail Runner got up and running. In 2008, voters in Los Alamos, Rio Arriba, Santa Fe and Taos counties approved the one-eighth of 1 cent gross receipts tax to finance operational costs and capital expenditures in the regional transit district. The counties agreed to a 2024 sunset to give voters a chance to revisit the tax.

At the time, the tax was supported by 64.1 percent of voters in Taos County and by 66.3 percent in Los Alamos County. Support for the tax in Santa Fe and Rio Arriba counties was 55.2 and 53.3 percent, respectively.

When developing the NCRTD’s long-range strategic plan in 2015, it was decided it was best to seek reauthorization this year, rather than waiting until 2022 or holding a special election in 2023.

NCRTD’s Nagle said it came down to the sooner the better.

“Especially when dealing with grants, you could be looking at them from a couple of years out,” he said. “As you get closer to the end of the time frame, it will become detrimental if it’s not resolved.”

Thirty percent of the NCRTD’s $12 million operating budget is made up of federal grants, while state grants make up 1 percent. Matching funds from local entities provide about $500,000, or 4 percent, of the operating revenues.

Most of the operating budget – 63 percent, or $7.57 million – comes from tax revenue.

On the expense side, 31 percent of the budget goes toward personnel expenses, including salaries and benefits for its 78 employees. Eighteen percent is dedicated to capital expenses and another 12 percent goes to operating expenses. The remaining 39 percent – $4.7 million – goes to the Rail Runner and Santa Fe Trails (the city of Santa Fe’s bus line) and Los Alamos County’s Atomic City Transit.

The NCRTD’s blue buses connect the Rail Runner to those bus lines, as well as New Mexico Park and Ride, the Chile Line, which serves the Taos area, and Red River Miner’s Transit. The NCRTD has 25 fixed and flex routes covering hundreds of miles throughout northern New Mexico.

The question that will appear on November ballots asks voters to repeal the 2024 expiration date, effectively allowing the tax to remain in place indefinitely.

Yvonne Chicoine, chairwoman of the Republican Party of Santa Fe County, says that shouldn’t be allowed to happen.

“Repealing the sunset clause makes the 2008 tax increase permanent, it unnecessarily and inappropriately deprives future taxpayers of a voice, and it makes it easy for government officials to avoid their responsibility to make sure the tax dollars they collect continue to deliver value to the community,” she told the Journal in an emailed statement.

The Rio Grande Foundation, a libertarian-leaning think tank, also opposes renewing the tax.

“We’ve never been big fans of the Rail Runner, generally speaking,” Paul Gessing, the foundation’s president, said in a phone interview. “When the Rail Runner was in discussion, the Rio Grande Foundation was saying, why not buses? They’re more cost efficient and flexible.”

Gessing said voting down the tax would not mean the end of regional transportation in northern New Mexico.

“That doesn’t mean political leaders won’t come back with something else,” he said, noting the tax doesn’t expire for another six years. “We have plenty of time for give and take to take place.”

Gessing said there are other ways to fund a transit system besides gross receipts taxes.

“Gross receipts are a regressive, economically harmful tax. We would like to see voters, even if it were to send a message, turn down these tax rates,” he said, adding that gross receipts taxes – which consumers pay on purchases of goods and services, similar to a sales tax – have done nothing but increase in most counties. “Voters should give this a really hard look.”

The NCRTD has taken its own hard look. It commissioned a survey to assess community support for the tax. Published in April, the survey was conducted by Research & Polling, an Albuquerque-based market research and public opinion research company. The results showed heavy support for the tax.

“Overall, four-in-five voters say they either strongly support (54%) or somewhat support (27%) extending the tax beyond 2024, compared to just 9% who are opposed to the tax extension,” the firm said in the executive summary of the survey.

Eighty percent or more in each individual county supported extending the tax. The survey suggests support could be even higher if voters knew how the NCRTD was funded and that the GRT was set to expire in 2024.

“While there is strong support for the tax extension, this could grow even stronger if voters are informed of all the different public transit operations the tax funds are subsidizing,” it says.

The survey showed that when respondents were informed that the tax supported regional bus service and the Rail Runner, 54 percent said they would be more likely to support the tax, 34 percent said it made no difference to them and 6 percent said they’d be less likely to support it.

Bolstering efforts to get voters to approve reauthorizing the tax, the NCRTD has hired a public relations firm, Albuquerque-based Griffin & Associates, to get the word out about the ballot question.

“With this, the District desires to create greater awareness amongst constituents and stakeholders to ensure that voters are better informed and understand what the upcoming ballot question is all about,” the NCRTD says on its website. “The program will also work to inform voters of the fact that this is not a new tax, but simply a reauthorization to keep the current one in place.”